The rapid growth of the crypto asset industry in recent years has sparked heightened concerns about potential risks to financial stability, according to a new working paper released by the International Monetary Fund (IMF).
The IMF research follows multiple failures in the crypto space, including the collapse of TerraUSD and FTX, which have led to calls to strengthen regulatory frameworks related to crypto assets. Moreover, the authors style the crypto industry as a rapidly growing “shadow financial system,” noting that while crypto assets offer benefits like more efficient payments, their integration into the broader economy still poses financial stability risks that existing policy frameworks do not yet have adequate tools to assess.
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